Mousavi-Khalkali v Abrishamchi & Anor

Service out of the jurisdiction requires the claimant to establish a real prospect of success, a good arguable case within a relevant gateway, and that England and Wales is the proper forum. The court must assess those matters afresh, without conducting a mini-trial.

Where another country is the natural forum, service out may still be permitted only if cogent evidence establishes a real risk that substantial justice will not be obtained there. Differences between legal systems, delay, corruption or general allegations of influence are insufficient without evidence of a case-specific risk. The court must also make a proportionate assessment of material non-disclosure at any without-notice hearing.

The claimant, a dual British-Iranian national, brought claims totalling approximately £3.48 million against an Iranian individual and an Iranian telecommunications company. The claims concerned a loan, fees for work on a telecommunications project, and an alleged compromise concerning payment for assistance in an arbitration.

Permission had been granted without notice to serve the claim form and particulars of claim out of the jurisdiction, and a freezing order had been made against the first defendant. The defendants challenged jurisdiction, sought to set aside permission for service out, and applied to discharge the freezing order. The central issues were whether the claims had a real prospect of success, fell within the relevant gateways, whether England and Wales was the appropriate forum, and whether the claimant had shown a real risk that substantial justice would not be available in Iran.

1. Jurisdiction and service out. The claimant bore the burden of establishing jurisdiction and persuading the court to exercise it. The assessment was to be made afresh, notwithstanding the earlier without-notice order.
2. The claims were not fanciful and had real prospects of success. That conclusion did not require resolution of disputed credibility, documentary or foreign-law issues. The court was not to conduct a mini-trial, but could assess inherent credibility, commercial reality, consistency and documentary support.
3. The claimant failed to establish a real risk that substantial justice would not be obtained in Iran. His dual nationality, the operation of the Iranian legal system, alleged corruption, the defendants’ wealth and connections, and alleged threats did not amount to cogent, case-specific evidence of such a risk.
4. The loan claim did not fall within the gateway in paragraph 3.1(4A) of Practice Direction 6B. Although its purpose related to the same project as the other claims, the underlying facts were different and remote. Iran was also clearly the natural and appropriate forum because the agreement was made there, was governed by Iranian law, involved Iranian banking documents, and depended on evidence from Iran.
5. The project-fees and compromise claims fell within paragraph 3.1(6)(a), but England and Wales was not clearly the natural forum. The central disputes concerned whether oral agreements had been made and what had been said in Farsi. Relevant documents, witnesses and linguistic context made Iran the more suitable forum.
6. The claimant had materially failed to make full and frank disclosure of his Iranian connections and a significant Telegram exchange. The failure did not itself prevent service out if otherwise justified, but warranted caution in assessing unsupported evidence and supported a costs sanction.
7. The freezing order fell away with the jurisdictional conclusion. In any event, the claimant had not shown a real risk of dissipation, and continuation would not have been just or convenient given the weaknesses in the case, delay and non-disclosure.

Permission for service out was set aside, the freezing order was set aside, the court declined to exercise jurisdiction, and provision was made for release of the money lodged in court.